NEW YORK: That agency adspend is increasingly moving to digital has long been recognised, but new research pinpoints just how much revenue the channel is taking from TV.
According to Standard Media Index (SMI), the data firm that tracks 80% of national US agency spend, digital adspend grew by 16% to $3bn between October 2014 and June 2015.
While $1bn of the total represented digital's organic growth year-on-year, a full $1.5bn was siphoned away from TV budgets, including $1.1bn from national TV and $400m from local and syndicated TV.
In addition, SMI calculated that $350m of print ad dollars and $150m of radio adspend shifted to digital over the period.
"This analysis lifts the veil on the true impact that digital media is having on the wider advertising market," said Scott Grunther, exec vp of media at SMI, in comments reported by Advertising Age. "It's not only a story of shifting share, but of organic growth as well."
Looking further at the state of national TV, SMI said that the scatter market – or air time that is sold closer to the actual programming air date – has clawed back about 35% of the ad revenue lost during the 2014-15 upfront. However, the remainder of the adspend has flowed into digital.
Meanwhile, a separate report covering the digital advertising industry in the US has revealed that 83% of senior client marketers believe agencies have not got sufficient expertise to handle data, digital migration and other multi-channel issues.
After polling 276 marketers in the first half of the year, the Chief Marketing Officer (CMO) Council found only 5% of respondents are more confident in their media partners than they were before.
Consequently, these marketers are looking to apply far more stringent ROI thresholds on their media and agency partners in order to maximise return.
Data sourced from Standard Media Index, Advertising Age, CMO Council; additional content by Warc staff